In an exclusive interview with Coinpedia, Sean Dawson, head of research at Deriv, shared his views on the macroeconomic factors and blockchain technology shaping the cryptocurrency market, particularly the trajectory of Ethereum. From changes in Federal Reserve policy to the growing role of Ethereum fund management companies, Sean outlined the factors that may shape the biggest drivers of the cryptocurrency market in 2025.
The Federal Reserve may cut interest rates in September
Sean told Coinpedia that he expects the Federal Reserve to cut interest rates by 25 basis points in September, with "95% odds on Fedwatch and about 80% on Polymarket."
He attributed this possibility to tensions in the labor market, where rising unemployment rates and a weaker revised jobs report have created pressure for a change in monetary policy.
Scalability of Layer 2 vs. Macro Economic Forces of Ethereum
When asked how upgrades like Dencun compare to broader macro effects, Sean was clear:
The main driver of Ethereum's price during this cycle has been investment management companies like Bitmain and Ethermachin. They now hold 3.6 million Ethereum (about 3% of the total supply), up from nearly zero in April of this year.
He explained that the demand for these treasury instruments is largely driven by the macroeconomy - as expectations for declining interest rates and increased U.S. government spending through the "Great Big Beautiful Bill" have pushed investors toward high beta operations like ETH treasury bonds.
However, Sean acknowledges that Layer 2 solutions are important, as they achieve the vision of a scalable online financial system, even if macroeconomic dynamics are a bigger short-term driver.
Ethereum is making strong progress against Bitcoin
Ethereum has recently demonstrated relatively strong performance compared to Bitcoin, and Sean sees this trend continuing:
The sudden surge of Ethereum fund management companies will provide a strong push for widespread adoption of Ethereum. I expect the Ethereum/BTC ratio to rise from its current level of 0.033 to the levels of 2017 - around 0.1 to 0.15 - by the end of this year.
Price Predictions for 2025
Looking deeper into the matter, Sean sees that both Bitcoin and Ethereum have significant growth potential:
Bitcoin (BTC): The odds of exceeding $150,000 by the end of the year are 50/50, with a significant potential rise to $200,000 at approximately 12% based on options market pricing.
Ethereum (ETH): More volatile than Bitcoin, with a 50/50 chance of reaching $6,000 and a 25% chance of reaching $8,000, especially if treasury demand aligns with macro trends.
Ethereum ETF vs. Bitcoin ETF in the next cycle
Regarding whether the Ethereum ETF can outperform the Bitcoin ETF in terms of inflows, Sean said:
It's possible, but unlikely. Bitcoin is the standard cryptocurrency. Ethereum's utility will help balance the flow of funds over time, but Bitcoin is likely to remain the preferred choice for institutions.
L2 token in institutional portfolio
Sean does not expect Layer 2 tokens to compete with ETH in institutional holdings anytime soon:
Ethereum took years to reach its current level of popularity compared to Bitcoin. Second-tier cryptocurrencies are fragmented and their value is dependent on Ethereum, so institutions that avoid risk will continue to use Ethereum for now.
The underestimated first-class ecosystem
While Sean focuses most of his predictions on the adoption of Bitcoin and Ethereum, he points out that Solana may see growth in the late cycle, especially if meme coin trading activity rebounds. If Solana adopts a treasury company strategy, it could mimic Ethereum's growth trajectory.
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